Mathematical Certitude

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ataloss
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Mathematical Certitude

Post by ataloss »

This procedure and his terminology leave me thinking that he is not stating that the swr in 2000 was 2%with "mathematical certitude" as hocus has said.
Bernstein never said any such thing, and I never said that he said any such thing.
Hocus 7/23/03


The language that I quoted in my post above puts the intercst and Bernstein perspectives in direct contradiction. Intercst says the SWR is 4 percent unless the past is different. Bernstein says the SWR is 2 percent unless the past is different. Neither is guessing. Both claim absolute mathematical certitude for what they are saying. Both claims are conditioned on a presumption that the future will be something like the past.
Hocus 2/5/03


Why is that? Because it is important. This debate goes right to the core of what is involved in putting together an effective FIRE plan. And how is this board positioned? Our arguments have been proven as a matter of mathematical certitude. That according to the world's leading expert on stock allocation strategies. We can't possibly lose.
Hocus 4/23/03

William Bernstein is no more able to predict the future than I am. But he understands that valuation levels affect returns, and that returns affect SWRs, and that, thus, valuation levels affect SWRs. Armed with that knowledge, he was able to state (not predict) that the SWR for invvestors retiring in 2000 was 2 percent, not 4 percent.
Hocus 5/24/2003

Intercst says that you come up with a 4 percent number when you assume that the future will be like the past, and this is just flat-out wrong. It is not just my opinion that it is wrong. It is wrong as a matter of "mathematical certitude.:" The data does not support this assertion. He should stop saying it. All others should stop saying it too. It is an assertion that at this point in time has been proven false beyond any reasonable doubt
Hocus 5/24/03
Have fun.

Ataloss
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Post by hocus »

I'm OK with this so long as everyone understands that the thing that Bernstein is claiming mathematical certitude for is his insight that valuations affect returns. Bernstein is not claiming mathematical certitude for his finding that the SWR at the top of the bubble was 2 percent.

That calculation was an implementation of the earlier insight. He did not "guess" the SWR or "predict" the SWR. He calculated the SWR. He looked at data.

Intercst has said that it is "loony" and "irrational" to believe that changes in valuation might affect SWRs. So the two positions are in direct contradiction.

Inercst is a as strong in his view that changes in valuation play no role in the calculation of SWRs as Bernstein is in his that they do. Intercst says that determining the SWR is a matter of "third-grade arithemetic," and the arithemetic that he employs in his study does not include any adjustment for changes in valuation levels.
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ataloss
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Post by ataloss »

If I accept any "corrections," I'll let you know, ataloss. You won't have to guess.
hocus 7/19

I am still confused by the fact that you said the things you "never said." In any case I am glad that now you have a better understanding Bernstein's position.

Maybe someday I will understand.


I am glad that you have stopped insisting that Bernstein somehow indicated that a 4% withdrawal rate was wrong as a matter of "mathematical certitude.
I haven't stopped making note of the "mathematical certainty" claim. I like the way that I say things better than the way that you report to the board the way I say things. I tend to be more careful about the wording, so I hope that board members will use my words to learn what I think on this subject rather than yours. But Bernstein has indeed made a claim about "mathematical certainty" that relates to the SWR question.
hocus 7/19/03

Your care with words is truly a wonder to behold. :wink:
Have fun.

Ataloss
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Post by hocus »

I am glad that you have stopped insisting that Bernstein somehow indicated that a 4% withdrawal rate was wrong as a matter of "mathematical certitude.

I've never stopped insisting any such thing.
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